NZ stocks: Only slight dent from wild offshore markets

12.00pm

The New Zealand sharemarket lost some ground today, but was holding up well after a rollercoaster day on Wall Street.

Volumes were again low, with $10.6 million traded just after 11am and the NZSE-40 capital index down 6.87 points to 2057.72.

On Wall Street, blue chip stocks posted a late rally as bargain hunters moved in after a breathtaking 440-point loss on the Dow.

Broker Alan Wills from Forsyth Barr Frater Williams said the sharemarket here continued to exhibit the small declines it had been suffering from since fears about accounting practices hit global equity markets.

"I suppose there's some relief that the US market, after a pretty horrendous fall mid-session, managed to climb back to finish marginally down. But our market is just continuing to lose around the edges every day. We're not seeing strong declines, but we're certainly not seeing a lot of volume or selling either.

"It's almost like investors are scared to invest in equities."

The fact that New Zealand's sharemarket was only losing ground "around the fringes" was due to the fact this country did not share the same problems with accounting or overvaluation, he said.

Shares were down across the board this morning, with Telecom leading the way, back 3c to 502 on $2 million worth of shares.

Brokers said Telecom's slide was more of a correction back to levels last week. Its Australian counterpart Telstra was off 10c to 550 despite winning a contract to handle all National Australia Bank's telephony, data and trans-Tasman communication services.

Other leading stocks to fall included Carter Holt Harvey, down a cent to 193; Contact Energy, back 3c to 386; Fletcher Building, down 1c to 268; and the Warehouse, down 5c to 744.

Auckland Airport slid 8c to 414 after yesterday's announcement that John Goulter was standing down next year as managing director. Brokers felt the decline was due more to the overhang of the Auckland City Council's 25 per cent stake in the airport.

Tranz Rail, which plumbed new lows yesterday to close at 215, was up 5c to 220 but analysts warned the recovery was fragile.

Tranz Rail has fallen out of bed with investors after a disappointing third quarter result and warnings of a lower than expected fourth quarter, and the rapid fall in value has nearly halved its market capitalisation in four months.

So far there have been 19 rises and 34 falls on 98 stocks traded.

Overnight, bargain-hunting investors in the US snapped up stocks pummeled to 1997 lows amid persistent fears about untrustworthy accounting and uncertain corporate profits.

Technology stocks led the rebound, yanking up the Nasdaq composite index from May 1997 lows touched earlier in the session. The Dow average lost 45.34 points, or 0.52 per cent, to 8,639.19, according to the latest data available. The broad S&P 500 lost 3.47 points, or 0.38 per cent, to 917.92, after touching lows unseen since May 1997. Defying expectations, the technology-loaded Nasdaq Composite finished up 9.01 points, or 0.66 per cent, at 1,382.54.

- NZPA